Here’s why UK and Israel authorities have expressed concerns over Binance

  • The UK’s FCA says Binance’s partnership with Paysafe is beyond its controlling hand
  • The financial watchdog still holds reservations, with insistence on the ‘significant risk’ warnings it issued against the exchange last year
  • Israel’s Capital Market Authority has suspended Binance operations in the country until the pending licensing issue has been clarified

Binance made headlines this week – both for good and bad reasons.

The crypto exchange announced the rebrand of some of its assets earlier this week. It was also reported to be under the spotlight of financial authorities in the UK. Not long after, Israel’s market regulator raised the alarm over the exchange regarding the services it offers. Worth noting, the US arm of the exchange, Binance.US, is being propped by the Securities and Exchange Commission.

FCA harbours concerns over the Binance-Paysafe deal

The UK’s Financial Conduct Authority (FCA) is getting increasingly worried over Binance’s deal with London-based payments processor Paysafe. The authority is seemingly not okay because the partnership gives Binance wide-ranging access to retail payments networks in the country via Faster Payments – a service integrated by Paysafe.

Binance only recently confirmed that bank transfers (deposits and withdrawals) via Faster Payments have resumed. Months earlier, the FCA issued warnings on significant risk to consumers and asked the exchange to halt its activity in the UK. The FCA’s concerns have not faded yet, but the regulator revealed its power over such a matter is restricted.

“Paysafe is aware of our concerns and is subject to close ongoing supervision consistent with our approach for firms of its size. We cannot comment further,” the FCA noted.

Binance has insisted that it remains committed to working with the FCA on a path towards compliance in the country following the warnings it has received in the past. On its part, Paysafe says it carefully assessed the exchange to ensure it complies with the required standards.

“We take our regulatory obligations extremely seriously and comply with the highest industry standards. We have performed thorough due diligence on Binance to ensure that they also comply with these high standards, as we do with all merchant partners,” the payments processor told Cointelegraph.

Paysafe CEO Philip McHugh said that Binance had shown commitment to walking the regulatory light. He also said his company would ensure that Binance customers follow all the anti-money laundering rules in addition to compliance checking.

Binance compelled to stop marketing to Israelis

The Changpeng Zhao-led exchange came under review by Israel’s Capital Market, Insurance, and Savings Authority on Thursday. The financial watchdog asked that the exchange specify its operations in the country. According to Globes news outlet, the authority queried Binance as it has not applied for a licence to operate in the country.

While the extent of inquiry has yet to be determined, Binance is seemingly preparing for the worst-case scenario. Binance has stopped all marketing activities in the country and limited accessibility for Israelites. Another local news outlet confirmed that Binance has since removed the Hebrew language option on its website.

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